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NI House Prices Continue to Rise According to Latest Ulster University House Price Index

10 November, 2021

The latest Quarterly House Price Index report from Ulster University has demonstrated how NI's housing continues to show strong activity levels and steady price growth with an annual increase of 10.6%,.  This has been driven in part by changing behavioral patterns that are consistent with recent quarters. The average house price of a residential property is now £198,821, representing a quarterly increase of 2.2% and is reflective not only of high market demand but also supply challenges and continued trading-up activity which was expedited by the phasing out of the stamp duty holiday at the end of September.

As we move into the fourth quarter of 2021 and towards a new calendar year, expectations among property agents remain that the post-lockdown resilience will continue in the short-term, albeit during a quarter that is traditionally quieter with regards to sales volume and market activity. Longer term challenges lie ahead, however, with rising energy costs fuelling inflation across the wider economy and the increasing likelihood of interest rate rises, with the potential to impact the housing market. 

Regional Outlook

Analysis at the regional level, based upon the 11 Local Government Districts (LGDs), indicates significant geographic variation in price growth representative of local market demand. Consistent with Q2 are pandemic trends involving supply inelasticity and a notable preference for peri-urban and rural housing, with agents surveyed highlighting an increased demand for properties beyond city limits.   

Further examination of the regional property market reveals that six of the eleven LGDs reported moderate to substantial price increases, with Derry City and Strabane (+17%) exhibiting the largest quarterly change from £123,525 to £149,085 driven by a spike in the number of detached properties transacting. Despite this double-digit rise, Derry City and Strabane remains the cheapest region across all LGDs. In contrast, Ards and North Down now has the most expensive average house price in Northern Ireland, after recording a 5.8% rise over Q2 2021 to £220,538. The Fermanagh and Omagh LGD displayed a similar increase (7%) taking the average house price to £192,571. House prices also increased moderately across Belfast (3.4%), Lisburn and Castlereagh (3.9%) and Newry, Mourne & Down (5.9%).

While Mid Ulster recorded a 15% increase from Q1 to Q2, the third quarter has seen a sharp correction of -13%, bringing the average house price down to £175,561. This has been attributed to a dip in the value of detached properties in the Mid-Ulster LGD, which were selling below that of Q2 pricing levels. Other LGDs where prices declined include Mid and East Antrim (-5.6%) and Causeway Coast and Glens (-4.3%) with average prices of £160,351 and £203,106 respectively, with each region experiencing a pronounced rise in activity within the apartment and terrace sectors relative to quarter two. The Antrim and Newtownabbey (1.4%) and Armagh City, Banbridge and Craigavon (1.3%) displayed negligible price declines with average prices now sitting at £169,043 and £163,864 respectively.

Summary

The post-lockdown momentum and subsequently high levels of activity have continued into the third quarter of 2021, with agents reporting market resilience and a tangible increase in transaction volumes. Demand remains high throughout Northern Ireland, driven in part by the recent push in completions prior to the phasing out of the Government’s Stamp Duty holiday. Geographical variance in demand and the market’s transition into what is traditionally a quieter period of the year, did however, see 27% of agents recording a small drop in transactional volumes this quarter.

The longer-term picture, however, must account for prevailing inflationary pressures within the wider economy including the likelihood of interest rate rises, and the potential impact on transaction levels.

At Progressive, we continually measure the changing performance of NI’s housing market to ensure we provide residential support and guidance to our members.

Quote

The post-lockdown momentum and high levels of activity in the housing market have continued in the third quarter of 2021, with demand remaining high throughout Northern Ireland. This has been influenced, in part, by the recent push in completions prior to the phasing out of the Government’s Stamp Duty holiday. Small transactional drops experienced by a minority of estate agents reflects both regional variance in demand and the market’s shift into quieter months of the year.

The market’s resilience and comparative affordability in the longer-term will be important with prevailing inflationary pressures within the wider economy potentially impacting transaction levels.

Read the full Northern Ireland Quarterly House Price Index Report here.

 

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